Green hydrogen, iron and steel could flow to Germany – UNSW study

On Friday Germany and Australia pledged $660 million to help create a green hydrogen export supply chain to Europe. At the same time UNSW Sydney researchers have released a first report exploring the feasibility of collaboration on exporting hydrogen and green metals – here is the executive summary of their study.

The global steel industry is among the most greenhouse gas-intensive sectors globally, accounting for approximately 7-9% of worldwide carbon emissions, and around a quarter of global industrial emissions.

However, it also has a key role to play in global decarbonisation efforts given its key role in sustainable built environment, infrastructure and clean energy technologies.

Currently, Europe ranks as the second-largest steel-producing region globally, contributing 267 million tonnes of steel in 2022.

Steel contributes an estimated 4% of the European Union’s total carbon dioxide emissions. Germany leads as the largest steel producer among European countries, with a 27% share of total production, supported by a workforce of 80,200 employees and a production capacity of 50.6 million tonnes in 2022.

Given the carbon intensity and economic significance of the steel industry to the regional economy, both Europe and particularly Germany are actively exploring decarbonisation options for this sector.

Australia currently stands as the largest global exporter of iron ore and metallurgical coal for steel making.

Its iron ore industry generates an estimated $124 billion in annual revenue and directly
employs almost 38,000 people.

The downstream emissions associated with these iron ore exports are around three times Australia’s total national greenhouse gas emissions; this, coupled with Australia’s ambitions to become a global net exporter of renewable energy, presents an extraordinary opportunity to have a major emissions impact globally, as well as adding value to Australia’s exports.

This report highlights the potential opportunities and synergies between Australia and Germany in establishing a green metal supply chain that can be used for ironmaking and steelmaking in Germany.

Such collaboration not only facilitates the decarbonisation of the German iron and steel industries but also opens new export opportunities for Australia.

Australia’s Competencies as a Green Exporter

Australia boasts one of the largest pipelines of renewable hydrogen projects in the world.

Additionally, Australian iron ore and steel companies are exploring the prospect of green iron and steel export.

This coupled with Australia’s track record for the development of large-scale energy export projects, reinforces the view that Australia can and will play a pivotal role in the future exports of green energy and related products.

Australia’s leading position in the existing global steel industry, combined with the country’s clean energy and renewable hydrogen plans and demonstrated capabilities in large infrastructure projects, represents one of the most promising pathways for Australia to support global emission reductions.

This also presents significant opportunities for local economic value addition, new manufacturing ventures, and export prospects for Australian industry.

These competencies are further emphasised by recent funding announcements including $4 billion for the Hydrogen Headstart programme, $300 million for the Advancing Hydrogen Fund, over $500 million for the Australian Regional Hydrogen Hubs Program, up to A$3 billion from the National Reconstruction Fund for renewables and low emissions technologies and the announcement of a $1.7 billion Future Made in Australia Innovation Fund focussing on priority industries including green metals.

Additionally, proposed tax incentives, such as the Hydrogen Production Tax Incentive, will provide a $2 incentive per kilogram of renewable hydrogen produced for up to ten years per project, as well as the Critical Minerals Production Tax Incentive which offers a tax offset of 10% for the costs of processing critical minerals currently listed in Australia.

Synergy with European Iron and Steel Market

Europe and Germany are exploring options to decarbonise their iron and steel production.

Australia currently only exports around 0.6 million tonnes of iron ore to Europe annually.
However, the synergy of abundant renewable energy, iron ore resources and strong international relationships has the potential to establish a value-added supply chain between Australia, Germany, and Europe, fostering the production and export of green iron, steel, and related products.

Collaborative projects such as The Australia-Germany Hydrogen from Renewable Energy Supply Chain Feasibility Study (HySupply) and German-Australian Hydrogen Innovation and Technology Incubator (HyGate) have already set a foundation for research and industry collaborations between the two countries that could support the development of a green metals supply chain between Australia and Germany.

The report – Green Metals for Sustainable Steel from Australia and Germany – was produced by a team of researchers and academics from UNSW’s School of Minerals and Energy Resources Engineering and the Australian Research Council (ARC) Training Centre for The Global Hydrogen Economy. The UNSW team includes Dr. Rahman Daiyan, Professor Iain MacGill, Professor Ismet Canbulat, Professor Serkan Saydam, Dr. Peter Ellersdorfer and Dr. Muhammad Haider Ali Khan.

Further reading:
$660m for Germany and Australia hydrogen supply chains

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